Systems and methods for maintaining the viability of a good-until-bettered order type in electronic trading systems

ABSTRACT

Systems and methods of trading items on an electronic trading system according to the invention are provided. The embodiments of the invention are based at least in part on a new order type. The new order type is a modification of a conventional good-until bettered order type. A good-until-bettered bid/offer is received along with instructions that specify a good-until-bettered increment value and/or duration. The good-until-bettered order is maintained in the electronic trading system until a bid/offer that is better by the specified plurality of standard trading increments is received by the electronic trading system and/or remains in the system for the good-until-bettered duration.

CROSS-REFERENCES TO RELATED APPLICATION

This application claims the benefit of U.S. provisional application No.60/673,614, filed Apr. 20, 2005, which is hereby incorporated byreference herein in its entirety.

BACKGROUND OF THE INVENTION

This invention relates to electronic trading systems. More specifically,this invention relates to order types for use in electronic tradingsystems.

Electronic trading systems typically provide participants with theability to enter orders into the system. More particularly, manyelectronic trading systems provide the ability for participants to enterresting (alternatively referred to herein as “passive”) bids and offers.Such trading systems may preferably hold the most attractive bids andoffers for browsing by other participants. These most attractive bids oroffers may be used to provide views of the “depth” of the pricesavailable on an instrument at price levels other than the best bid andoffer price levels.

In the same or other systems, a best bid—i.e., the bid having the bestprice such as the highest dollar or nominal price or the lowest yield—ora best offer—i.e., the offer having the best price such as the lowestdollar or nominal price or the highest yield—may be removed when arespective better bid or offer enters the market. This allowsparticipants to concentrate on their bids and offers when they are atthe best market price. Bids that are bettered are commonly referred toas “topped” and offers that are bettered are commonly referred to as“cut”. A bid that tops another is one that has a better price—e.g., ahigher dollar or nominal price or a lower yield. Similarly, an offerthat cuts another is one that has a better price—e.g., a lower dollar ornominal price or a higher yield. Such a bid or offer that is removedfrom the trading system on occurrence of it being topped or cut may bereferred to as a “good-until-bettered” order. This is in contrast to a“limit” order that remains listed and available for trading in a tradingsystem until traded or cancelled. In the latter situation, participantsplacing such orders are forced to remain constantly aware of theirexistence. A limit order may be set to remain good until traded orcancelled for a trading session, multiple trading sessions or any othersuitable period.

One of the advantages of a good-until-bettered order type is that insome situations a participant may only want to bid or offer for a shorttime span. Alternatively, a participant may only want to bid or offerwhile her attention is focused on a particular instrument. In suchsituations a good-until-bettered order reduces the duration of the orderin the system.

For example, if the market price of that instrument moves away from theparticipant's desired bid or offer level without her bid or offer orderbeing fully executed, the participant may select to trade in anothersimilar marketplace, or on another instrument. In these situations, theparticipant may not desire to cancel her existing good-until-betteredorder. In the interests of speed and efficiency a good-until-betteredorder type may become preferable to a limit or other order type,especially in fast moving markets where a participant's thoughtprocesses, or a computer's processing speed, are at a premium.

An occasional disadvantage of a good-until-bettered order type occurswhen there is a gap in the inside market—e.g., when there may be arelatively large price differential between the best bid and the bestoffer or even just a price differential of one price increment or more.In such a situation, a participant working a good-until-betteredbid—e.g., showing a desire to transact without wishing to leave the bidif the market moves away from the desired price—could be taken advantageof by another participant topping him, canceling the originalparticipant's topping bid, and subsequently bidding at the original bidprice ahead of the original participant. If a first participant isworking a “good-until-bettered” bid order in such a situation, asubsequent “topping participant” taking advantage of a gap in the marketmay knock the first participant's order out of the trading system eitherunnecessarily, or for the topping participant's trading advantage. Thismay be contrary to what the first participant intended, and often servesto unnecessarily remove liquidity from the trading system by knockingout good-until-bettered orders, even when the market price of theinstrument is not moving away from them.

Another disadvantage of certain types of orders relates to lockedmarkets. Locked markets are markets where a bid and offer exist at thesame price but do not trade. Some trading systems allow a bid and offerto co-exist at the same price without matching them. Reasons that sometrading systems may allow this may include (but are not limited to) thesizes of the bid and offer being incompatible; the customers who enteredthe bid and offer being unable to trade with each other for credit orother reasons; neither participant being willing to pay brokerage thatthe trading system may need as a precursor to matching a trade; or thetrading system awaiting another priority participant to be timed out ina trading auction situation such as in the trading system described inU.S. Pat. No. 6,560,580. Participants may also top and cut in suchtrading systems by locking a contra offer or bid—i.e., placing a bidwith a price that matches a current offer price, or an offer with aprice that matches a current bid price—but either not allow the justentered bid and just entered offer to trade, or by taking advantage ofthe trading system rules such that the locking bid or offer will nottrade. In such circumstances, the previous market bids or offers thatare good-until-bettered may be canceled but no trade may occur.

It is therefore an object of the present invention to provide systemsand methods for maintaining the viability of a good-until-bettered orderin electronic trading systems.

Summary of the Invention

This and other objects are accomplished in accordance with theprinciples of the invention by providing systems and methods of tradingitems on an electronic trading system. The embodiments of the inventionare based at least in part on a new order type. The new order type is amodification of a conventional good-until-bettered order type. A methodaccording to the invention includes receiving a good-until-betteredbid/offer or other suitable order or trading command in a particularmarket; receiving instructions that specify a good-until-betteredincrement value, the good-until-bettered increment value being one thatfurther specifies a standard trading increment amount for the bid/offerand maintains the good-until-bettered bid/offer in the electronictrading system until a bid/offer that is better—i.e., a bid/offer havinga better price—by the specified amount of—i.e. at least one'standardtrading increments is received by the electronic trading system. Inother words, the good-until-bettered bid is maintained until it istopped by another bid having a better price—e.g., a higher dollar ornominal price or a lower yield—by the specified amount of standardtrading increments. Similarly, the good-until-bettered offer ismaintained until it is cut by another offer having a better price—e.g.,a lower dollar or nominal price or a higher yield—by the specifiedamount of standard trading increments. Finally, when the bid/offer thatis better by the specified amount of standard trading increments isreceived by the electronic trading system, the good-until-betteredbid/offer is canceled.

Another method according to the invention includes receiving agood-until-bettered bid/offer or other suitable order or tradingcommand; receiving instructions that specify a good-until-betteredduration setting, the good-until-bettered duration setting being on thatfurther specifies a good-until-bettered duration for the bid/offer andmaintains the good-until-bettered bid/offer in the electronic tradingsystem until a bid/offer that is better than the good-until-betteredbid/offer is received by the electronic trading system and remains inthe system for the specified good-until-bettered duration. Finally, whenthe bid/offer that is better than the good-until-bettered bid/offerremains in the system for the good-until-bettered duration, thegood-until-bettered bid/offer is canceled.

BREIEF DESCRIPTION OF THE DRAWINGS

The above and other objects and advantages of the invention will beapparent upon consideration of the following detailed description, takenin conjunction with the accompanying drawings, in which like referencecharacters refer to like parts throughout, and in which:

FIG. 1 is a block diagram of an exemplary system that may be used toimplement the processes and functions of certain embodiments of thepresent invention; and

FIG. 2 is a flow diagram that shows one method according to theinvention.

DETAILED DESCRIPTION OF THE INVENTION

Electronic trading systems that use a conventional good-until-betteredorder type afford participants the advantage of being able to bid oroffer at current markets without concerning themselves with canceling orotherwise removing these bids and offers if the market price moves awayfrom their order. In accordance with the invention, a trading system maybe given a system setting to only cancel good-until-bettered orders ifthey are topped or cut by more than a certain amount X of minimum priceincrements. The initial system setting of X may be two minimum priceincrements for US Treasuries. An exemplary increment in US Treasuries isthat two-year Treasury Notes trade at a market participant standardminimum price increment of ⅛ of 1/32 of one percent of the nominal valueof the Treasury Note. This value of X may be set either by the tradingsystem for a particular participant, or by the particular participant,and the trading system may be configured for either value to prevail.

With such a novel order type, participants have the ability topreferably prevent such topping and cutting for trading advantage. Theexistence of such an order type may in itself dissuade such activity onthe trading system, as protagonists of topping and cutting for tradingadvantage may not know which orders would be knocked out by thepractice.

In some trading systems the existence of a limit order is displayed byan attribute, which may be a ˆ, a ★, or some other suitable character,or even an electronic attribute available for electronic interpretation.In these trading systems the existence of good-until-bettered orders maythus be uncovered, and become a target for the practice of topping orcutting for trading advantage. The importance of the invention on suchtrading systems may become particularly apparent to participants, inthat it makes such a practice less likely to succeed because manygood-until-bettered orders would not be knocked out by such a practiceof closely tailored topping or cutting.

Additional Solutions:

With respect to a bid that topped an existing bid or an offer that cutan existing offer, the previously entered market bid or the previouslyentered market offer may, in some embodiments of the invention, still betopped or cut, and consequently knocked out of the trading system by anew order which may improve the market price by even less than thepreferably pre-determined price increment or number of price increments,when a timer indicates that the subsequent bid that topped, or offerthat cut, has been in the system for a specified, preferablypre-determined, amount of time. The amount of time may preferably beadjustable depending on the volatility of trading; the time of day; theproximity of economic figures being released; the market price or amoving average of such being outside certain boundaries; or some othersuitable factor.

This embodiment of the invention preferably alleviates the problem ofparticipants who had previously entered market bids and offers fromhaving those market bids and offers topped or cut by another order thatdoes not then exist in the system for a relatively long time. Such atime threshold would continue to permit more serious subsequent bids andoffers, as evidenced by the amount of time these subsequent bids andoffers remain in the system, to cut or top the previously entered bidsand offers, respectively. The amount of time that such a subsequentorder may be listed on the trading system in the “order book” before itcan cut or top another order may act to stop participants abusing thetrading system for their advantage, but still enable the advantages ofthe good-until-bettered order type to persist.

The confluence of the above-described innovations for agood-until-bettered order type further refines and enhances theprotection of a good-until-bettered order from being unnecessarilytopped or cut. Good-until-bettered orders may be firstly protected frombeing prematurely knocked out of the trading system order book via therequirement that new orders be of more than one pre-determined priceincrement better than the good-until-bettered order; and may then beadditionally, or alternatively, protected in that the topping or cuttingorder is required to be maintained in an available state in the tradingsystem for a certain period of time before the good-until-bettered ordermay be knocked out.

In the case of a topping or cutting order improving upon thegood-until-bettered order by more than the pre-determined increment, thetime restriction as explained above stops topping or cutting fromimmediately taking place. In the case of a topping or cutting order thatis less than the pre-determined increment, the time threshold (or,alternatively, duration requirement) allows a genuine topping or cuttingorder to appropriately top or cut, albeit after a preferablypredetermined amount of time. Thus, according to the invention, thegood-until-bettered order type retains its advantage of excusing aparticipant from maintaining, or being required to cancel or remove,active orders or positions in a market for which they no longer have acontinuing bona fide interest, but is preferably protected from beingknocked out of the trading system prematurely where the market price hasnot moved substantially enough to warrant cancellation. Participants whowant bids or offers to linger in the market for a longer period than theorder type above allows (irrespective of whether they are topped, cut,or no longer at the best price level) may use a limit order preferenceas known in the art.

Aggressive Orders as New Markets

In many trading systems, there is a differentiation between a “passive”bid or offer, and an “aggressive” take or hit (otherwise referred to asbuy or sell). Passive orders may exist in the trading system and providelists of bids and offers on a particular instrument, whereas aggressivesells or buys (hits or takes) may execute upon those passive bids oroffers. Preferably, in such trading systems, an order type may beemployed that turns such an aggressive buy or sell order into a passivebid or offer where no contra offer or bid is available to trade with.This functionality is related to an order type referred to herein as“Order as New Market”. Order as New Market preferably allows theparticipant to enter a Buy or Sell order that may not be at the bestprice and still have it subsequently accepted as a new bid or offer andbe permitted to persist in the order book.

These orders may be accepted as executable orders and stay in thetrading system order lists or order book. For instance, if theparticipant enters an aggressive good-until-bettered buy order and failsto match against any offers—i.e., does not get executed—if the marketprice of the instrument moves up as the participant enters the order,any good-until-bettered order that may be retained by the trading systemmay be knocked out by a better bid entered at that time or afterwards.The Order as New Market functionality preferably turns this aggressivetrade attempt order into a good-until-bettered order, and the newsettings according to the invention, as described in more detail abovefor such orders, may allow the exemplary order to be accepted as a neworder for the trading system order book. The new order may be entered bythe same participant that entered the good-until-bettered order or byanother participant. The new good-until-bettered order type as disclosedabove may protect such an order from being knocked out of the tradingsystem by (1) either better orders coming in just before or almost atthe same time as the participant's aggressive order, or (2) subsequenttopping and cutting orders.

In such a fashion, the participant can be afforded the convenience ofhaving his aggressive order retained by the trading system, whichaggressive order may otherwise have been discarded due to no execution,and also enjoying the added benefit of the trading system keeping saidorder in the order book. The order may be maintained in the order bookup to a configurable amount of price increments away from the best bid,and such that the participant's new order is not knocked out by otherorders received at or about the same time. Preferably, the participantmay also determine a finite period of time that his new order thenremains in the trading system.

Referring to FIG. 1, exemplary system 100 for implementing the inventionis shown. As illustrated, system 100 may include one or moreworkstations 110. Workstations 110 may be local or remote, and areconnected by one or more communications links 102 to communicationsnetwork 103 that is linked via communications link 105 to server 120.Server 120 may be linked to back office clearing center 130 viacommunications link 107.

Server 120 may be any suitable server, processor, computer, dataprocessing device, or combination of the same. Server 120 may be used toimplement the governing logic that processes and executes orders andtrades, and distributes trade and market information, including priceand size information, to workstations 110. Communications network 103preferably includes the Internet but may consist of any suitablecomputer network such as an intranet, a wide-area network (WAN), alocal-area network (LAN), a wireless network, a digital subscriber line(DSL) network, a frame relay network, an asynchronous transfer mode(ATM) network, a virtual private network (VPN), or any combination ofthe same. Communications links 102 and 105 may be any communicationslinks suitable for communicating data between workstations 110 andserver 120, such as network links, dial-up links, wireless links,hard-wired links, etc.

Workstations 110 may be personal computers, laptop computers, mainframecomputers, dumb terminals, data displays, Internet browsers, PersonalDigital Assistants (PDAs), two-way pagers, wireless terminals, portabletelephones, etc., or any combination of the same. Workstations 110 maybe used by participants to enter bid, offer, buy and sell orders for theitems being traded and view market activity corresponding to theseitems.

A typical workstation 110 may include processor 111, display 112, inputdevice 113, and memory 114, which may be interconnected. In a preferredembodiment, memory 114 includes a storage device for storing aworkstation program for controlling processor 111. Memory 114 may alsostore user configuration files, as described below, and other data onthe storage device. The workstation program may include a tradingapplication for running a trading interface that may be displayed ondisplay 112. Input device 113 may be used in conjunction with display112 by users to enter good-until bettered bids/offers and to execute andmonitor trades. Processor 111 may use the workstation program to receivetrade information relating to the items being traded by multiple usersof system 100, or other users, and display such information on display112 or communicate such information to display 112. For example,workstation 110 may receive a good-until-bettered order as well asinstructions that specify: a good-until-bettered increment valuespecifying an amount of standard trading increments for the order,and/or a good-until-bettered duration setting specifying agood-until-bettered duration for the order.

Server 120 may include processor 121, display 122, input device 123, andmemory 124, which may be interconnected. In a preferred embodiment,memory 124 includes a storage device for storing a server program thatprovides the governing logic for controlling processor 121. Processor121 may use the server program to process orders and execute tradescommunicated from various workstations that are operated by multipleusers of system 100, or other users, and communicate trade information,as well as bid and offer information, to workstations 110 and backoffice clearing center 130. More specifically, processor 121 may use theserver program to process orders placed by users in response to usersentering commands using input device(s) 113, and execute trades based onsuch orders, whenever applicable.

For example, server 120 may maintain the good-until-bettered order inthe electronic trading system until a bid or offer that is better thanthe good-until-bettered order by the specified amount of standardtrading increments is received by the electronic trading system and/oruntil a bid or offer that is better than the good-until-bettered orderis received by the electronic trading system and remains in the systemfor the good-until-bettered duration. Thereafter, the server 120 maycancel the good-until-bettered order.

Back office clearing center 130 may be any suitable equipment, such as acomputer, a laptop computer, a mainframe computer, etc., or anycombination of the same, for causing trades to be settled and/orverifying that trades are settled. Communications link 107 may be anycommunications links suitable for communicating data between server 120and back office clearing center 130, such as network links, dial-uplinks, wireless links, hard-wired links, etc.

FIG. 2 is a flow chart 200 that describes one embodiment of a methodaccording to the invention. Step 210 shows providing a user with anopportunity to configure a good-until-bettered increment setting. Step220 shows providing a user with an opportunity to configure agood-until-bettered duration setting. Step 230 shows receivinggood-until-bettered order information for a good-until-bettered order.Step 240 shows placing the good-until-bettered order on an electronictrading platform available to trade. Preferably the good-until-betteredorder incorporates the increment setting and/or the duration setting.Alternatively, the system monitors the good-until-bettered order andmaintains it within the system until the appropriate conditions haveoccurred.

If the good-until-bettered order is not immediately acted upon, asqueried in step 250, another trading participant, or the sameparticipant that entered the good-until-bettered order, may enter asecond order on the same side of the market as the good-until-betteredorder, as shown in step 260.

In such a circumstance, the good-until-bettered order may remain in thesystem even though trading priority has passed to the second order, asshown in step 260.

Step 270 shows that the good-until-bettered order is preferably notwithdrawn (alternatively referred to herein as “cancelled”) from themarket until the pre-determined time period passes and/or the secondorder is a sufficient number of increments better than thegood-until-bettered order.

Step 280 shows that in response to the withdrawal of an order, thesystem may be configured, either by a user or by a system configuration,to preferably immediately generate a second order on behalf of theparticipant that entered the good-until-bettered order. The second orderis preferably on the same side of the market as the good-until-betteredorder. The second order is preferably entered and maintained at asystem-set or user configured number of increments away from the bestorder on the same side of the market. Such a generated order allows theparticipant associated with the good-until-bettered order to maintainparticipation in a market that has moved away from his originalgood-until-bettered order, while limiting his exposure todifficult-to-predict market changes.

For example, a good-until-bettered bid may be maintained until it istopped by a better bid by the specified amount of standard tradingincrements and/or may remain in the system for the specifiedgood-until-bettered duration. A better bid may be a bid with a higherprice, such as a bid higher in dollar or nominal price, or a bid with alower price, such as a bid lower in yield. Similarly, agood-until-bettered offer may be maintained until it is cut by a betteroffer by the specified amount of standard trading increments and/or mayremain in the system for the specified good-until-bettered duration. Abetter offer may be an offer with a lower price, such as a bid lower indollar or nominal price, or an offer with a higher price, such as anoffer higher in yield.

It has been shown that systems and methods for providing agood-until-bettered order type according to the invention are provided.

The embodiments described hereinabove are further intended to explainbest modes known of practicing the invention and to enable othersskilled in the art to utilize the invention in such, or other,embodiments and with the various modifications required by theparticular applications or uses of the invention.

Accordingly, the description is not intended to limit the invention tothe form disclosed herein. Also, it is intended that the appended claimsbe construed to include alternative embodiments.

1. A method of trading items on an electronic trading system, the methodcomprising: receiving a good-until-bettered bid; receiving instructionsthat specify a good-until-bettered increment value, thegood-until-bettered increment value that further specifies an amount ofstandard trading increments for the bid; maintaining thegood-until-bettered bid in the electronic trading system until a bidthat tops the good-until-bettered bid by the specified amount ofstandard trading increments is received by the electronic tradingsystem; and when the bid that tops the good-until-bettered bid by thespecified amount of standard trading increments is received by theelectronic trading system, canceling the good-until-bettered bid.
 2. Themethod of claim 1 further comprising requiring the bid that tops thegood-until-bettered bid to remain in the system for a predeterminedamount of time before canceling the good-until-bettered bid.
 3. Themethod of claim 1 further comprising receiving user instructions thatspecify the good-until-bettered increment value.
 4. The method of claim1 further comprising receiving instructions from the electronic tradingsystem that specify the good-until-bettered increment value.
 5. Themethod of claim 1 further comprising, following the canceling of thegood-until-bettered bid, generating a new bid on behalf of a tradingparticipant associated with the good-until-bettered bid.
 6. The methodof claim 5 wherein the new bid differs from a current best bid by apredetermined plurality of increments.
 7. The method of claim 1 whereinthe maintaining the good-until-bettered bid comprises maintaining thegood-until-bettered bid until a bid having a price that is higher thanthat of the good-until-bettered bid by the specified amount of standardtrading increments is received by the electronic trading system.
 8. Themethod of claim 1 wherein the maintaining the good-until-bettered bidcomprises maintaining the good-until-bettered bid until a bid having aprice that is lower than that of the good-until-bettered bid by thespecified amount of standard trading increments is received by theelectronic trading system.
 9. The method of claim 1 wherein the bid thattops the good-until-bettered bid is received from a trading participantassociated with the good-until-bettered bid.
 10. A method of tradingitems on an electronic trading system, the method comprising: receivinga good-until-bettered offer; receiving instructions that specify agood-until-bettered increment value, the good-until-bettered incrementvalue that further specifies an amount of standard trading incrementsfor the offer; maintaining the good-until-bettered offer in theelectronic trading system until an offer that cuts thegood-until-bettered offer by the specified amount of standard tradingincrements is received by the electronic trading system; and when theoffer that cuts the good-until-bettered offer by the specified amount ofstandard trading increments is received by the electronic tradingsystem, canceling the good-until-bettered offer.
 11. The method of claim10 further comprising requiring the offer that cuts thegood-until-bettered offer to remain in the system for a predeterminedamount of time before canceling the good-until-bettered offer.
 12. Themethod of claim 10 further comprising receiving user instructions thatspecify the good-until-bettered increment value.
 13. The method of claim10 further comprising receiving instructions from the electronic tradingsystem that specify the good-until-bettered increment value.
 14. Themethod of claim 10 further comprising, following the canceling of thegood-until-bettered offer, generating a new offer on behalf of a tradingparticipant associated with the good-until-bettered offer.
 15. Themethod of claim 14 wherein the new offer differs from a current bestoffer by a predetermined plurality of increments.
 16. The method ofclaim 10 wherein the maintaining the good-until-bettered offer comprisesmaintaining the good-until-bettered offer until an offer having a pricethat is lower than that of the good-until-bettered offer by thespecified amount of standard trading increments is received by theelectronic trading system.
 17. The method of claim 10 wherein themaintaining the good-until-bettered offer comprises maintaining thegood-until-bettered offer until an offer having a price that is higherthan that of the good-until-bettered offer by the specified amount ofstandard trading increments is received by the electronic tradingsystem.
 18. The method of claim 10 wherein the offer that cuts thegood-until-bettered offer is received from a trading participantassociated with the good-until-bettered offer.
 19. An order type fortrading on an electronic trading system, the order type comprising: agood-until-bettered order comprising: a configurable increment componentthat deactivates the good-until-bettered order when a respective bid oroffer that is entered into the trading system differs from thegood-until-bettered order by a predetermined number of tradingincrements.
 20. The order type of claim 19 wherein: thegood-until-bettered order is a good-until-bettered bid; and thegood-until-bettered bid is deactivated when a bid is entered into thetrading system at a predetermined number of trading increments higherthan the good-until-bettered bid.
 21. The order type of claim 19wherein: the good-until-bettered order is a good-until-bettered bid; andthe good-until-bettered bid is deactivated when a bid is entered intothe trading system at a predetermined number of trading increments lowerthan the good-until-bettered bid.
 22. The order type of claim 19wherein: the good-until-bettered order is a good-until-bettered offer;and the good-until-bettered offer is deactivated when an offer isentered into the trading system at a predetermined number of tradingincrements lower than the good-until-bettered bid.
 23. The order type ofclaim 19 wherein: the good-until-bettered bid or offer is agood-until-bettered offer; and the good-until-bettered offer isdeactivated when an offer is entered into the trading system at apredetermined number of trading increments higher than thegood-until-bettered bid.
 24. A method of trading items on an electronictrading system, the method comprising: receiving a good-until-betteredbid; receiving instructions that specify a good-until-bettered durationsetting, the good-until-bettered duration setting that further specifiesa good-until-bettered duration for the bid; maintaining thegood-until-bettered bid in the electronic trading system until a bidthat tops the good-until-bettered bid is received by the electronictrading system and remains in the system for the good-until-betteredduration; and when the bid that tops the good-until-bettered bid remainsin the system for the good-until-bettered duration, canceling thegood-until-bettered bid.
 25. The method of claim 24 further comprisingrequiring the bid that tops the good-until-bettered bid to be differentby a predetermined amount than the good-until-bettered bid beforecanceling the good-until-bettered bid.
 26. The method of claim 24further comprising receiving user instructions that specify thegood-until-bettered duration setting.
 27. The method of claim 24 furthercomprising receiving instructions from the electronic trading systemthat specify the good-until-bettered duration setting.
 28. The method ofclaim 24 further comprising, following the canceling of thegood-until-bettered bid, generating a new bid on behalf of a tradingparticipant associated with the good-until-bettered bid.
 29. The methodof claim 28 wherein the new bid differs from a current best bid by apredetermined plurality of increments.
 30. A method of trading items onan electronic trading system, the method comprising: receiving agood-until-bettered offer; receiving instructions that specify agood-until-bettered duration setting, the good-until-bettered durationsetting that further specifies a good-until-bettered duration for theoffer; maintaining the good-until-bettered offer in the electronictrading system until an offer that cuts the good-until-bettered offer isreceived by the electronic trading system and maintained in theelectronic trading system for the good-until-bettered duration; and whenthe offer that cuts the good-until-bettered offer remains in the systemfor the good-until-bettered duration, canceling the good-until-betteredoffer.
 31. The method of claim 30 further comprising requiring the offerthat cuts the good-until-bettered offer to be different by apredetermined amount than the good-until-bettered offer before cancelingthe good-until-bettered offer.
 32. The method of claim 30 furthercomprising receiving user instructions that specify thegood-until-bettered duration setting.
 33. The method of claim 30 furthercomprising receiving instructions from the electronic trading systemthat specify the good-until-bettered duration setting.
 34. The method ofclaim 30 further comprising, following the canceling of thegood-until-bettered offer, generating a new offer on behalf of a tradingparticipant associated with the good-until-bettered offer.
 35. Themethod of claim 34 wherein the new offer differs from a current bestoffer by a predetermined plurality of increments.
 36. An order type fortrading on an electronic trading system, the order type comprising: agood-until-bettered order comprising: a configurable duration componentthat deactivates the good-until-bettered order when a respective bid oroffer that is entered into the trading system differs from thegood-until-bettered order and remains in the trading system for apredetermined duration.
 37. The order type of claim 36 wherein: thegood-until-bettered order is a good-until-bettered bid; and thegood-until-bettered bid is deactivated when a bid is entered into thetrading system higher than the good-until-bettered bid.
 38. The ordertype of claim 36 wherein: the good-until-bettered order is agood-until-bettered bid; and the good-until-bettered bid is deactivatedwhen a bid is entered into the trading system lower than thegood-until-bettered bid.
 39. The order type of claim 36 wherein: thegood-until-bettered order is a good-until-bettered offer; and thegood-until-bettered offer is deactivated when an offer is entered intothe trading system lower than the good-until-bettered offer.
 40. Theorder type of claim 36 wherein: the good-until-bettered order is agood-until-bettered offer; and the good-until-bettered offer isdeactivated when an offer is entered into the trading system higher thanthe good-until-bettered offer.
 41. An electronic trading systemcomprising: a workstation for: receiving a good-until-bettered order;and receiving instructions that specify a good-until-bettered incrementvalue, the good-until-bettered increment value that further specifies anamount of standard trading increments for the order; and a server for:maintaining the good-until-bettered order in the electronic tradingsystem until a bid or offer that is better than the good-until-betteredorder by the specified amount of standard trading increments is receivedby the electronic trading system; and when the bid or offer that isbetter than the good-until-bettered order by the specified amount ofstandard trading increments is received by the electronic tradingsystem, canceling the good-until-bettered order.
 42. An electronictrading system comprising: a workstation for: receiving agood-until-bettered order; and receiving instructions that specify agood-until-bettered duration setting, the good-until-bettered durationsetting that further specifies a good-until-bettered duration for theorder; and a server for: maintaining the good-until-bettered order inthe electronic trading system until a bid or offer that is better thanthe good-until-bettered order is received by the electronic tradingsystem and remains in the system for the good-until-bettered duration;and when the bid or offer that is better than the good-until-betteredorder remains in the system for the good-until-bettered duration,canceling the good-until-bettered order.